Dong-A Pharmaceutical is accelerating its efforts to conquer overseas markets, spearheaded by its derma-cosmetics brand "FATION." While Bacchus and general medicines account for approximately 70% of total sales, the company aims to diversify its revenue structure by nurturing its cosmetics business—which continues to post double-digit growth—as a new growth axis.

However, the derma-cosmetics business still accounts for a mere 3.7% of Dong-A Pharm's total sales. A key challenge has emerged: connecting expanded overseas distribution networks with actual sales growth and profitability improvements to establish it as a core business following Bacchus and general medicines.

According to Dong-A Pharm on the 13th, FATION is increasing its points of sale and strengthening its sales capabilities by expanding into the United States, Greater China, Japan, and Southeast Asia.

Recently, FATION's Noscarna Nine Toner, Serum, and Cream were launched on the official online mall of Watsons Thailand. This broadens customer touchpoints by adding sales channels to supply products to local consumers in a market the company has already entered. Furthermore, Dong-A Pharm is currently recruiting experienced professionals for B2B sales in the Americas for its FATION business division. These personnel will be responsible for discovering new buyers and distributors in the US and Latin America, managing sales with existing clients, and handling local online and offline channel entry and promotional operations.

Dong-A Pharm's revenue base remains heavily centered around Bacchus and general medicines. In the first half of this year, sales for the Bacchus division reached 148.4 billion won, while the general medicine division recorded 140.1 billion won. Together, these two divisions accounted for approximately 69% of the total 416.2 billion won in sales. To drive outward growth, the company faces a pressing need to cultivate businesses that can generate additional revenue alongside its traditional mainstays.

Sales for the derma-cosmetics business, including FATION, rose 33.4% year-on-year to 15.5 billion won in the first half. Although the growth rate is high, its share of total sales remains at about 3.7%. For derma-cosmetics to establish itself as a new growth engine, the sales scale must expand beyond current levels.

The expansion of overseas distribution networks is interpreted as a move to secure additional revenue by leveraging the product and brand foundation established domestically.

The steady increase in FATION's sales highlights the growth potential of both domestic and international operations. Sales surged by approximately 86% over a two-year span, rising from 13.2 billion won in 2023 to 21.3 billion won in 2024, and reaching 24.6 billion won last year.

Launched in 2019, FATION is a brand that expanded Dong-A Pharm's research capabilities—accumulated through the development of topical skin medications—into the cosmetics business. It has targeted the skin trouble and soothing care market by highlighting the Noscarna Nine line, which applies the proprietary ingredient "Heparin RX Complex" developed by the company's Derma Research Center.

Amid a recent trend where pharmaceutical and biotech companies incorporate their proprietary ingredients and know-how into cosmetics manufacturing to strengthen their derma-cosmetics portfolios, Dong-A Pharm's research prowess is increasingly recognized as a competitive edge.

High global interest in K-Beauty is also serving as an opportunity to scale up FATION's overseas business. The growing number of international consumers seeking Korean skincare products tailored to specific skin concerns and efficacies is another positive factor. Market conditions have thus matured for selling FATION's core trouble-relief and soothing products abroad.

Consequently, FATION has secured opportunities to supply local consumers by entering global beauty specialty retailer Sephora and major Southeast Asian health and beauty chain Guardian.

In August, FATION entered the "Olive Yard K-Beauty Edit" display shelves across 55 US Sephora stores, supplying four items from the Noscarna Nine line: toner, serum, cream, and serum mask. In Southeast Asia, following the opening of brand flagship stores on Shopee and Lazada in Vietnam and Malaysia in 2024, the company announced its entry into 150 Guardian stores in Malaysia and 20 in Singapore last February. In China as well, it is combining online sales with local distribution channels, entering beauty select shop Hmey following online platforms like Tmall and Douyin.

However, for overseas distribution network expansion to truly contribute to the growth of the derma-cosmetics business, it must translate into local sales and repeat orders. While entry into Sephora and Guardian has secured a sales foundation, the ultimate performance contribution of the overseas business depends on how much sales volume can be driven and sustained through these channels.

To this end, FATION is simultaneously launching new products. It has expanded its product scope from a focus purely on trouble soothing to pore care, hydration, and hyperpigmentation management. This strategy aims to broaden the customer base to consumers with diverse skin concerns and encourage repeat purchases from existing customers.

"As consumer trends emphasizing meticulous evaluation of product ingredients, efficacy, and quality spread, interest in functional and reliable derma-cosmetics is growing," a Dong-A Pharm official stated. "We expect that the expanding global interest in K-Beauty and rising demand for efficacy-driven skincare will create a highly favorable market environment overseas."

[ⓒ Global Economic Times. 무단전재-재배포 금지]